The S&P 500 is one of the most popular indexes in the world. With the 500 largest companies tracked by the S&P 500 Index since 1957, it is commonly used as a benchmark for the entire U.S. Stock Market.
The S&P 500 is a free-float market capitalization-weighted index, which means that stocks are not only weighted by their market capitalization, but also by their free-float factor. The free-float represents the portion of stock's shares that are not restricted or held by big investors and company insiders.
The stocks that are part of the S&P 500 index are chosen from the largest American stock exchanges (NYSE and NASDAQ) by a team of analysts and economists working for the Standard & Poor's (S&P Index Committee). The Standard & Poor's owns the S&P 500 as well as several other indexes.